A trust enterprise may, based on the agreement made in the trust agreement, mandate a foreign professional custodian bank to lend out the foreign securities in the trust assets of a professional investor according to the following guidelines:1. The trust enterprise should know fully and assess the extent of trustor's knowledge and experience in lending out securities.2. The trust agreement should contain a clause to the effect that "The trustor agrees that the trustee may mandate a foreign professional custodian bank to lend out foreign securities in the trust assets", and should disclose information on risks and fees associated with mandating a foreign professional custodian bank to lend out the foreign securities in the trust assets, including the default risk or credit risk associated with the borrower and the foreign professional custodian bank, and the market price volatility risk and liquidity risk of the collateral furnished by the borrower, and fees arising from the lend-out and how the fees are paid.3. The term "foreign professional custodian bank" in the preceding paragraph shall meet all of the criteria specified below:(1) Having been established for at least 3 years;(2) Ranking in the top 500 in the world by asset or net worth in the past year and the assets under custody are valued more than US$500 billion.(3) Long-term credit rating is at or above a certain level given by a credit rating agency provided in Appendix 7.A trust enterprise shall establish internal operating guidelines for mandating foreign professional custodian banks to lend out foreign securities in the trust assets and submit the guidelines and any revision thereafter to its board of directors for approval.The internal operating guidelines of a trust enterprise for mandating foreign professional custodian banks to lend out foreign securities in the trust assets shall contain at least the following:1. Where the trustee does not have discretion over the use of trust assets according to the trust agreement, the objects of investment, method, amount, terms and conditions, and duration of the investment will be handled according to the specific instructions of the trustor; where the trustee has discretion over the use of trust assets according to the trust agreement, there should be proper internal decision-making process for the management and utilization of the trust assets.2. Personnel with professional knowledge and experience should be assigned to take charge of the lending business.3. When signing a securities lending agreement with a foreign professional custodian bank, the clauses of the agreement should heed the prevention of contract risk, counterparty risk, operational risk and collateral risk.4. When signing a securities lending agreement with a foreign professional custodian bank, the clauses of the agreement should cover at least the mechanism to monitor the performance of duties by the foreign professional custodian bank, including the types of assets for reinvestment, specific investment guidelines, requirements for and range of borrowers, types of collateral, collateral maintenance ratio, collateral call process, fee schedule, agreed court of jurisdiction, and items to be periodically reported by the foreign professional custodian bank, as well as the obligations of the foreign professional custodian bank in case of default by the counterparty, and periodic follow-up of performance.5. The objects of reinvestment under the preceding subparagraph must have a maturity date of less than 2 years and comply with these Regulations and restrictions set forth in applicable laws and regulations.6. The collateral maintenance ratio shall not be less than 100%.7. The types of non-cash collateral must comply with these Regulations and restrictions set forth in applicable laws and regulations.8. Where foreign bonds guaranteed or issued by a sovereign or an institution serve as the non-cash collateral mentioned in the preceding subparagraph, the issue rating of such foreign bonds must be at or above a certain level given by a credit rating agency provided in Appendix 6 or Appendix 7.9. Internal control systems.10. Internal audit systems.Appendix 6 (Sovereign Credit Ratings)【Applied to Non-professional Investor】 .pdfAppendix 7 (Long-term Credit Ratings of Issuers or Guarantors, and Issue Ratings)【Applied to Non-professional Investor】.pdf